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Death of the Amazon Reseller

5 Reasons to Go Private Label in 2022

We’ve noticed an ongoing trend with certain types of Amazon seller accounts for years now: Amazon gives preference to Private Label sellers with brand registry and their own products. When resellers have a problem with their account, the responses from Amazon just don’t come in the same form. Frankly, Amazon simply seems less likely to assist resellers – and that trend is increasing more than ever. 

We’ve all seen plenty of wholesale sellers with huge storefronts, filled with name brands, making tons of sales. Buying big brands and reselling them on Amazon was once a brilliant way to rake in tons of cash – but not anymore. 

Amazon realizes that even the most meticulous resellers pose a risk to the overall integrity of the platform. After all, when so many sellers are buying goods from so many different sources, a few customers are bound to receive products that aren’t quite what they pictured. Amazon buyers are the worst critics of all – if a single one of them complains, a seller has a major problem. Yes, Amazon will deactivate an account because one buyer complained. This isn’t typically the case with trademarked, branded products. 

Here are 5 reasons why every reseller should consider Amazon private label in 2022.

  1. Better Treatment from Amazon. Of course, every Amazon seller gets stuck in the infamous “Seller Performance Cyclone”, with nonsensical, duplicate responses coming in more often than anyone outside the industry would ever imagine. The difference between the cyclone for private label sellers is that ultimately, they’re able to prove that the products they’re selling are theirs. They’re able to show UPCs, images, manufacturing documentation and everything else Amazon might ask for. When you’re reselling big brands, the chances of obtaining proof of “your supplier’s supply chain” is next to impossible. 
  1. More Freedom with Listing Content. When you’re selling someone else’s brand, there’s no control over what appears on the product detail page. From a sales rank standpoint, that means you’re at the mercy of whoever is optimizing that brand’s listings. And from a compliance standpoint, it means that if someone else’s branded ASIN gets “pesticide’d”, there’s essentially nothing you personally can do about it until the brand owner manages to get it reinstated. 
  1. Higher Margins. We’ve worked with resellers who have hundreds of thousands of dollars in their account balances, yet still worry about their profits. The margins for reselling name brand items – and even the number of brands that actually allow it – are low, and getting lower. With a trademarked brand of your own, there are endless categories, products and suppliers to work with that will let you keep much more of your disbursement. 
  1. Breaking Free from Brand Restrictions. Big brands don’t want their reputations tarnished. That means more of them are enacting harsh brand protection measures on a daily basis, removing sellers from their listings on Amazon, sending cease and desist letters, etc. Some have even pulled their brands from the entire Amazon platform. When you’re reselling, there’s a good chance that the brand owners for your top selling ASIN may pull the rug out from under you overnight. Even though there are always issues with Amazon for both resellers and private label sellers, this is one that’s erased from the picture once a seller chooses a private label model. 
  1. Longevity. Amazon is moving swiftly to phase out resellers – that’s a fact. They’re responding less when resellers get suspended, restricting a higher number of listings, and issuing violations on big brand products more and more often. With a private label brand, sellers gain the benefit of longevity on the Amazon platform. As long as a private label seller can keep producing a product buyers like and maintain a loyal customer base, their Amazon sales will remain steady – no matter how drastic Amazon’s policy changes become.